The Movie Industry's 200% Error

Submitted by News on January 29, 2008 - 4:00am

A week ago today, the Motion Picture Association of America (MPAA) issued what had to be a hugely embarrassing news release[1] acknowledging that an aggressively promoted and widely cited research report commissioned by the MPAA in 2005 significantly overstated the Internet-based peer-to-peer piracy of college students: "The 2005 study had incorrectly concluded that 44 percent of the motion picture industry’s domestic losses were attributable to piracy by college students. The 2007 study will report that number to be approximately 15 percent." The MPAA release attributes the bad data to an “isolated error,” adding that it takes the error seriously and plans to hire an independent reviewer “to validate” the numbers in a forthcoming edition of an updated report.

We should applaud the MPAA for going public with a painful press release about what some have tagged the “200 percent error.” ( Note: Here and elsewhere in this article, this percentage has been fixed from an earlier version -- our own little mathematical error.) Unfortunately, the MPAA has yet to release the actual reports that generated either the 44 percent or 15 percent claims about the role of college students in digital piracy; the public data are limited to PowerPoint graphics in PDF format on the association’s web site. Perhaps as part of its efforts to validate the numbers in the new report the MPAA will also make public the complete document, not just the summary graphics. (Academics do know something about peer review.)

We also have to admire the MPAA’s arrogance. The MPAA now asserts that college students account for 15 percent rather than 44 percent of the P2P piracy affecting the motion picture industry. However the press release says nothing -- not a word -- about the source of the other "85 percent" of the P2P piracy that affects the industry’s revenues, the activities of "civilians" who use consumer broadband services.

Consistent with past practice, the January 22nd MPAA statement continues to blast college students (and by extension campus officials) about the (now much reduced) levels of P2P piracy linked to college students: “Although college students make up three percent of the population, they are responsible for a disproportionate amount of stolen movie products in this country.” Additionally, the news release closes with a terse pledge that the MPAA “will continue to aggressively fight piracy on all fronts including working to forge alliances with other copyright organizations [and] deploying technologies that help combat piracy…”

The new (corrected) MPAA data affirm what many of us who follow this issue have said for several years:[2] P2P piracy is primarily a consumer market issue. The enabling technology is not a campus network but the consumer broadband service provided by cable and telcom firms such as AT&T, Comcast, Earthlink, TimeWarner, and Verizon, among others. Of course you would never know this from last week’s news release.[2]

The MPAA’s statement is also laden with errors and misrepresentations. Let’s begin with some basic facts and simple math. The MPAA’s release says that “college students make up three percent of the [U.S.] population.” In fact, “college students” ages 16-67, account for almost 6 percent of the US population. The Department of Education reports the projected number of full- and part-time college students in two and four-year degree-granting institutions for the 2007-08 academic year totals some 18 million students;[3] the U.S. Census Bureau reports that the U.S. population as of December 2007 totals some 303,579,509 individuals.[4] Do the math and you’ll find that 5.9 percent of the nation’s population could be classified as “college students,” a population that includes full-time undergraduate and graduate students, part-time students in undergraduate and graduate programs, commuter students in community colleges, and adults enrolled in online degree programs, among others.

But the population of college students that most concerns the MPAA are the undergraduates who live in campus dorms and who have 24/7 access to high speed campus networks: these are typically college freshmen and some sophomores in large public universities and the majority of undergraduates in small, private liberal arts colleges. The dorm residents total some two million students[5] and account for 11 percent of the much larger population of 18 million college students, ages 16-67.

I and others continue to provide evidence that colleges have policies and impose sanctions on students who engage in illegal P2P activity using campus networks. Unfortunately, the MPAA and the Recording Association of America[6] continue to press for costly “technology solutions” that campus IT experts have deemed both expensive and ineffective.

Now let’s turn the MPAA’s claim that college students account for a “disproportionate amount of stolen movie products.” The real metric for assessing “proportionality” should not be college students as a proportion of the total U.S. population, which includes millions of infants and the elderly who don’t go the movies or rent DVDs, but college students as a proportion of the movie-going population. Although the MPAA does not publish separate data for college students as a proportion of the U.S. movie-going audience, it does report that individuals aged 12-24 account for 28 percent of the “movie going” public.[7] (Interestingly, the MPAA data seem to ignore all the “moviegoers” under age 12: this makes you wonder about Hollywood’s infamous accounting practices and suggests that no one under age 12 goes to the movies. But what about millions of kids under age 12 who went to see Pirates of the Caribbean, Cars, Night at the Museum, Superman Returns, Ice Age, Happy Feet, and Over the Hedge -- seven of the top 10 grossing films in 2006?)

Extrapolating from the MPAA’s public data on paid admissions (i.e., the number of purchased movie tickets) we see that individuals aged 18-24 accounted for 19 percent of the 1.332 billion movie tickets sold in 2006. Admittedly, a significant number, but not all, of the 18-24 year olds going to movies in 2006 were college students. But without condoning illegal P2P piracy, these numbers suggest that the proportion of downloading that the MPAA now attributes to college students (15 percent) may be roughly proportionate (or possibly even “under-proportionate”) to college students as a segment of the movie going public. (Perhaps the MPAA will offer up a grant for an independent study of the movie-going behaviors of college students, plus additional funds to find the millions of “missing” children under age 12 who are not included in their numbers about movie attendance.)

Then there is the news release’s closing statement about “deploying technologies that will help combat piracy,” which ignores the June 2007 Congressional testimony of both campus information technology officials and an IT industry executive[8] that technology will never provide a comprehensive solution to stem P2P piracy.

At one time seemingly infallible in its continuing efforts to portray college students as digital pirates and campus officials as unengaged and unconcerned about digital piracy on campus networks, the MPAA now seems like the “association that can’t shoot straight,” a reference to Jimmy Breslin’s 1970 mob farce about a bungling Mafia gang. The January 22 press release is the second significant screwup for the MPAA on the P2P front in the past few months: in fall 2007, the MPAA released a software toolkit it said would help monitor illegal P2P activity on campus networks. Unfortunately, as reported by Brian Krebs of The Washington Post,[9] the MPAA’s monitoring application posed a major risk to network security. In sum, it appears that the MPAA can’t count and also can’t do code.

But the MPAA’s press release also raises other interesting questions, some involving the backstory about the press release, some involving public policy questions now before Congress. With regard to the backstory, Inside Higher Ed's coverage of the MPAA press release [10]reveals that members and staff of some key Congressional Committees knew about the errors in the MPAA data almost a week before the press release. Why did it take five days for the MPAA to acknowledge publicly the misleading data?

And then there are the issues involving public policy (and public posturing). Drawing on the MPAA’s widely publicized claims that college students accounted for 44 percent of the industry’s domestic loses due digital piracy, members of Congress have made public statements blasting P2P activity on college networks and by college students. Rep. Howard Berman (D-Calif.) who chairs the House Subcommittee on the Internet[11] and Rep. Bart Gordon (D-Tenn.), chairman of the House Committee on Science and Technology[8] each convened congressional hearings about P2P piracy on campuses in 2007. These hearings, coupled with the continuing efforts of the RIAA and the MPAA, led to Congressional mandates intended to address illegal P2P piracy as part of the College Opportunity and Affordability Act of 2007.

Provisions of the College Opportunity and Affordability Act of 2007 intended to address P2P piracy on campus include reporting requirements and an implied mandate to acquire a “technology solution” to stem P2P piracy. Both will involve significant costs for campuses: at the Congressional hearing on P2P convened by Gordon last June, Arizona State University CIO Adrian Sannier testified that his institution had spent approximately $450,000 on P2P technology deterrent software over the past six years; Mr. Sannier also described illegal P2P activity as an “arms race” that neither side will win, an assessment affirmed by other campus CIOs testifying at the June hearing.

Congressional mandates to stem P2P come at an interesting time for nation’s colleges and universities. In the wake of the recent, tragic events at Virginia Tech and at other institutions, colleges and universities have been scrambling to develop emergency notification plans and acquire notification technologies – some that are simple such as alarms and sirens and others that are complex such as notification and messaging systems that send email, text messages, and voice mail.[12] Concurrently, given the downturn in the economy in recent months, many institutions now confront both mid-year budget recissions and impending budget cuts for the coming year. In many cases, colleges and universities had little or no money in their budgets this year for either notification systems or P2P monitoring technology.

Will college leaders receive a formal apology from the MPAA for the consequences of its “200 percent error.” Will Berman and Gordon issue new statements in the coming weeks, toning down their prior criticism and also admonishing the MPAA for providing bad data that led to ill-conceived legislation - the costly P2P reporting and enforcement mandates in the College Opportunity and Affordability Act?

And what about the source of the “other 85 percent” of the P2P piracy that affects the movie industry? Much as the RIAA and MPAA have named the campuses where they allege P2P piracy occurs, will the two associations now go public with (hopefully accurate) data about the level of P2P piracy that occurs on consumer broadband services? (Are AT&T broadband customers more likely to engage in P2P piracy than Earthlink, TimeWarner, or Verizon customers?) Much as the MPAA and RIAA leadership has criticized campus officials for not engaging on P2P issues, will the MPAA and RIAA’s leaders now take cable and telcom industry executives to task for their benign efforts to educate their customers about copyright and to address P2P activity on consumer broadband services?

Let me affirm (yet again) that the campus community does not condone digital piracy and that I am not condoning the behaviors of either college students or “civilians” who engage in digital piracy . As I stated in a November commentary published by Inside Higher Ed,[13] "illegal P2P downloading is a messy issue. But the swiftboating efforts of the RIAA and the MPAA to portray college students as the primary source of digital piracy will not resolve this problem, in either the campus or the consumer markets. Neither will federal mandates that ultimately will mean pass-through costs for students."

Next steps? Perhaps the MPAA’s press release acknowledging its “200 percent error” will set the stage for new, less rancorous private and public discussions about P2P piracy. Colleges and universities respect copyright; colleges and universities are engaged in serious efforts to inform and educate students about the importance of copyright. And MPAA and RIAA officials, beginning with MPAA President Dan Glickman and RIAA President Cary Sherman, should acknowledge, respect and strongly support the continuing efforts of campus officials to address copyright issues, in part by ending the public posturing that portrays colleges and universities as dens of digital piracy.